Answer: If the appraisal is for loan purposes, the report is used as an instrument for decision-making. In the case of a loan, the appraisal is used to determine if the collateral is there for security in case of a default. The lender is the client and the appraiser must not be an advocate for anyone during the development or delivery of the appraisal. The homeowner could be considered as having influenced the appraiser. To discourage any possibility of inappropriate action, the lender must control the appraisal once delivered. Your lender has to provide you a copy of the appraisal upon request.

2. Why did I pay more to my lender for the appraisal than the typical fee quote?

Answer: In some cases the appraiser is only doing a portion of the assignment. The lender may have to do a field or desk review, an audit, or some other supplemental task that must become a part of the overall appraisal assignment. The fee is all inclusive of such requirements. Please note that some appraisal management firms are actually acting as partners in the development of the appraisal.

3. Why does it cost so much for only 10 minutes work?

Answer: The field appraiser can measure a typical home in a short time and take a quick look around for the quality and condition of the improvements. The real work comes later. It is necessary to pull comparable properties in the area, research each one to see if it is “an arm’s length transaction”, if it closed escrow, has any special features and if necessary, call the agents involved in the sales for more information.

A photo must be taken for each sale and the subject information must be obtained from at least 2 sources to confirm accuracy. After all information is compiled, the information is typed into the form and crossed checked for accuracy. Upon completion, the report is sent to the reviewer’s department where it is reviewed for quality. This takes about 4 to 10 hours per report.

4.Why can’t I pay more for a rush?

Answer: At Tosh & Associates, all orders are completed in a timely manner. No appraisal is more important than another. It would be necessary to set aside someone else’s report to finish yours and that is not our policy.

5. Why does the appraisal take so long to complete?

Answer: It is necessary to gather all the information about the assignment, verify that information, and rely on some third party sources for some of the answers. This takes time and can’t be rushed at the expense of quality; therefore, we can’t promise a faster turn time. With that said, we do our best to turn the reports as quickly as we can without sacrificing quality.

6. How can you appraise my house when you don’t live in my neighborhood?

Answer: An appraiser’s job is to determine “a value” as defined at the time the assignment is accepted. An appraiser is not supposed to be “biased” in any way. If we lived in your neighborhood, we could have a biased opinion one way or another. We are supposed to clear our personal opinions and let the neighborhood provide the information for the analysis.

We can appraise a property in any given area, provided we do the right research and ask the right questions. Our living arrangements have little to do with our abilities to research for results. Note: people who were never in the place they wrote about have written many factual books.

7. Why can’t we pay for the appraisal at the close of escrow?

Answer: Need you ask? So many in the past have promised to pay for the work completed and never did.

8. Why can’t I order a comp check?

Answer: For an appraiser to complete a comp check is considered an appraisal. It would be necessary to have a work file with all the information held in a storage facility for 5 years. A comp check from an appraiser is not the same as a property profile or CMA from a realtor. The appraiser is required to comply with USPAP (Uniform Standards of Professional Appraisal Practice) when it is understood that he or she is acting as an appraiser.

9. Why don’t we just use AVMs and forget about appraisals altogether?

Answer: The automated valuation models are a dangerous instrument for the lending industry to rely on for quality product. We must always remember what we learn in history, or we will re-live history. The S&L debacle occurred because someone wanted to ease the requirements for quality, citing that it was too time consuming. Since fraud can be committed as easily as misleading value based upon a façade and if the integrity of the foundation of our financial strength is in real estate, aren’t we at great risk? If we have bank robbers, smugglers, gangsters and Wall Street criminals, why should we allow another form of deception? Remember Enron. The appraiser is the eyes and ears of the lender and the quality of the portfolio, for your retirement may be in the hands of the investor of real estate loans. What do you think?

10. I have a detached guesthouse. Does that count as part of my house?

Answer: No. The improvement must be a part of the home and have direct access to the home. If you have a converted garage and you are paying property taxes on that area as a part of the heated living area, it should be counted. If no permits were issued and/or provided to us, that area will be considered a garage.

11. Can I write a personal check for the appraisal or use a credit card?

Answer: No, we only accept payment in the form of Certified funds such as a cashier’s check made payable to Tosh & Associates. Credit Card payments are no longer available effective 1-1-13.

12. How come the last time I had an appraisal completed no appraiser showed up and yet an appraisal was completed.

Answer: This is known as a drive-by appraisal. It is a limited analysis without the benefit of actually verifying the condition or size of the home. This is typical when your credit score and security is such that the risk factor is minimal.

13. My appraisal is scheduled between 2 and 3. It is now 2:35 and no one has showed up. Did the appraiser forget about me or what?

Answer: No. The arrival window is between 2 and 3. This allows for traffic and other difficulties that may arise with the previous appointment. The actual inspection begins after the arrival and may only take a few minutes to complete.

14. What happens if I change lenders?

Answer: The new lender may call us and we can establish an appraiser/client relationship with the new lender and a minimal fee will be charged. If the new lender has guidelines that are unacceptable, we will decline to work with them and you will be required to have a new appraisal completed by an appraiser that will comply with their guidelines.

15. How does the appraiser determine value?

Answer: It is first necessary to define the appraisal problem. In so doing it is necessary to identify the intended use and intended user. This is important, since the purpose can impact the final value by mere definition.

Example: if the value need is for a “quick sale”, it may require a sampling of like properties with market times less than typical.

Once the assignment begins, it is necessary to gather all possible information about the subject property. Comparable sales are searched for that are as recent as possible. The guidelines are that the comparables be less than 6 months old and within 1 mile of the subject. Please note that sales can’t be ignored or skipped over just to reach out and find higher sales farther away for a more favorable result.

The sales must be similar in size, age, quality and style. If it is not possible to find closed sales in the immediate area, it may be necessary to expand the search to a wider range in distance as well as other distinctions. Keep in mind that the farther away you must go from the subject to find a sale, the more like the subject it must be. It is also necessary to use older sales, listings and pendings in the immediate area for an accurate assignment of value.

The value assigned is based upon the least gross adjustments, or in other words, the comparable sale most like our subject. It is improper to add all the sales together and divide by the total. This is averaging and will be misleading by the very nature of the search. If you wanted to manipulate the results, how easy would it be to throw in a high or low sale in the general area that shouldn’t be used at all?

Finally, the assigned value must be bracketed within the sales, prior to any adjustments and it must also not be outside the adjusted brackets.